Base rate is set to enter its fifth year at 0.5pc, meaning savers have a while
longer to suffer from pitifully low rates.

This week it is likely that base rate will enter its fifth year at 0.5pc. In March 2009, the Bank of England's Monetary Policy Committee (MPC) dropped base to this all-time low level. Savers must have hoped this was but a temporary blip – but sadly it looks as if they have a while longer to suffer from pitifully low rates.

Indeed, last week Paul Tucker, one member of the MPC said it had even discussed the possibility of negative base rate.

While that seems unlikely, it does give savers an indication of the way the wind is blowing. There is unlikely to be any increase in base rate for a while. And to reinforce this message, yet again there have been further cuts in offshore savings rates.

Nationwide International, Alliance & Leicester and Norwich & Peterborough have all chopped rates for savers. Alliance & Leicester has cut its fixed rates by up to 0.3 of a point. For one year it is now paying 1.75pc on £5,000, down from 2pc. And for two years, Alliance & Leicester International is now paying 2pc on £5,000 plus – it was paying 2.3pc.

That reduction makes Co-operative Bank International's 2.5pc on £5,000 for two years look particularly attractive. Co-operative's one-year fixed rate of 2.31pc also looks much better than anything else on offer. Indeed, Co-op's three-year fixed rate of 3pc is miles above the next best on offer: Permanent Bank International's 2.15pc.

Such is the lack of competition on medium- to long-term fixed rates that Co-operative's one-, two- and three-year fixed rates are all higher than the best five-year fixed rate, Lloyds TSB International's 2pc. As such, Co-operative's rates are likely to sell out quickly to savers desperate for the certainty only a fixed rate can offer.

But it's not only fixed rates that have been hit. The Nationwide International rates cuts are to its variable- rate Bonus Access, Bonus 1+ and Bonus 95 accounts. It has cut 0.1 of a percentage point off its deals – but even so, they remain some of the best on sale at the moment.

Bonus Access is now paying 1.5pc on £25,000, the same rate as paid on £5,000 by Alliance & Leicester International and by Britannia International, also on £25,000.

For sterling notice accounts, the highest rate is now paid by Kleinwort Benson (Channel Islands) – 1.76pc – but it is on a minimum deposit of £100,000 and the notice period required is a long 189 days.

Savers can, however, get 1.75pc on 60 days' notice from Britannia International on a minimum of £25,000.

Norwich & Peterborough Gibraltar has chopped 0.4 of a percentage point off its Branch Notice Saver account, cutting it to 1.65pc on a minimum £1. However, this account is only on offer to Gibraltar residents and expats living on The Rock.

While searching out the top interest rate is, of course, a good idea, in a way it remains a fruitless search. With UK inflation at 3.3pc, if your finances are still tied to sterling then you need to earn at least that just to maintain the value of your money. That is impossible at current expat savings rates.

And it's not much easier if your finances are tied to other countries and currencies: typical inflation in Europe is 2pc, as it is in Australia – and in South Africa, it's 5.4pc.

According to Adrian Lowcock, of UK financial advisers Hargreaves Lansdown, inflation in the UK has eroded the spending power of cash by more than 13pc in the four years since base rate fell to 0.5pc.

He said: "Keeping your savings in cash is not risk-free as, over the longer term, inflation slowly erodes the value of cash. At current inflation of 3.3pc, the purchasing power of cash will be halved in 21.35 years."

He suggested that savers consider taking a risk and putting their money into investment funds instead, namely, equity income funds.

"I believe that equity income investments are a major driver of portfolio growth in today's world and provide investors with an asset that can provide a growing dividend above the rate of inflation.

"Opportunities to invest in strong companies paying sustainable dividends exist in both the UK and across the major global equity markets," he said.